Correlation Between Evofem Biosciences and Kodiak Sciences

Can any of the company-specific risk be diversified away by investing in both Evofem Biosciences and Kodiak Sciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Evofem Biosciences and Kodiak Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evofem Biosciences and Kodiak Sciences, you can compare the effects of market volatilities on Evofem Biosciences and Kodiak Sciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Evofem Biosciences with a short position of Kodiak Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evofem Biosciences and Kodiak Sciences.

Diversification Opportunities for Evofem Biosciences and Kodiak Sciences

-0.7

Correlation Coefficient

Evofem Biosciences  Kodiak Sciences

Excellent diversification

The 3 months correlation between Evofem and Kodiak is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Evofem Biosciences and Kodiak Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Sciences and Evofem Biosciences is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Evofem Biosciences are associated (or correlated) with Kodiak Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Sciences has no effect on the direction of Evofem Biosciences i.e., Evofem Biosciences and Kodiak Sciences go up and down completely randomly.

Pair Corralation between Evofem Biosciences and Kodiak Sciences

If you would invest  242.00  in Kodiak Sciences on September 2, 2024 and sell it today you would earn a total of  425.00  from holding Kodiak Sciences or generate 175.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Evofem Biosciences  vs.  Kodiak Sciences

Evofem Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Evofem Biosciences is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Kodiak Sciences

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kodiak Sciences are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Kodiak Sciences exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Evofem Biosciences and Kodiak Sciences

The main advantage of trading using opposite Evofem Biosciences and Kodiak Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evofem Biosciences position performs unexpectedly, Kodiak Sciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kodiak Sciences will offset losses from the drop in Kodiak Sciences' long position.

The idea behind Evofem Biosciences and Kodiak Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.